Friday, January 30, 2009

Several executives trust gut published this month, a post by Thomas Wailgum, entitled To Hell with Business Intelligence: 40 Percent of Execs Trust Gut. He wrote about a recent research from Accenture. According the research, nearly half (40 percent) of major corporate decisions are based on the good 'ole gut. Accenture surveyed more than 250 executives in July 2008 about their companies' use of and investment in business analytics to remain competitive.

He started his post with: "The gut. That amazing piece of the human body's digestive system has influenced personal and business decision-making for centuries.

And apparently, the gut is still alive and well as a business tool inside today's corporate environments—even with the server farms' worth of enterprisewide business intelligence (BI), CRM, ERP and supply chain data that companies have amassed over the years."

Some numbers of the research:
- 61 percent said it was because good data was not available.
- 55 percent said their decisions relied on qualitative and subjective factors.
- 23 percent said "insufficient quantitative skills in employees" were a main impediment at their company.
- 36 percent said their company "faces a shortage of analytical talent."

He also mentioned a recent report from Aberdeen Group, by research director David Hatch. According him, the report examines why companies struggle with "one version of the truth" and how BI reporting and analytic tools fit into the picture. "Many organizations spend months and endure significant costs to obtain the reporting and analysis capabilities that BI promises," Hatch writes, "only to find that different 'versions of the truth' still exist without any definite way of determining which one is real or accurate."

Some numbers from the Aberdeen's report:
- 36 percent wanted to replace "gut-feel" decisions with "fact-based" ones.
- 72 percent said they are striving to increase their organization's business analytics and BI use.
- Two-thirds surveyed recognize their decision-making failings and want to fix them.

He finished with: "So, given all these data points, companies are starting to put their "money where their mouths are," when it comes to BI and analytics tools. But losing that gut-first instinct isn't going to be easy, and I'm not sold on whether companies can stomach the change required."

In my opinion, those numbers of the mentioned researches are reflecting how is difficult to implement a business intelligence and performance management initiative that works effectively. One of the main reasons is the lack of executive sponsorship and active business involvement. The BI/PM initiative should be designed thinking on business and with an active participation of the business people. The companies should to develop a BI Competency Center and also rethinking BI for processes. Last but not least, the companies need to concern about the data quality, establishing a policy of data governance. After all, if executives don't have accurate data to make decisions, left only to trust gut.


Neil Raden said...


I don't think you can separate gut from analytics, because all analytics can do is inform your decision and at some point you have to apply your gut to the analytics.

This is all pretty silly, though, because if you deconstruct the argument, what it really means is "I don't understand analytics so I'm going to make this argument about the value of my gut."

In 1996, I was on a Guru Panel at one of the first TDWI conferences (in fact, it may have been the first). To my right was Bill Inmon and on my left, Herb Edelstein. Alan Paller was moderating and a woman in the back asked this question: "Why do we need all of this data? Don't the men (yes, she said men) who run these companies just use their instinct?"

Alan was walking towards me with the microphone and I was dreading having to respond, but as luck would have it, at the last second, he passed me and handed the microphone to Herb.

Herb gave a heavy sigh, and I could see he had no more enthusiasm for this question than I did, but he brightened up and here is what he said:

"Let me tell you how to run a $100 million company. First, start with a billion dollar company, then run it on intuition."

Marcus Borba said...


I agree with you. I don’t separate gut from analytics. I am talking about the executives that don’t have accurate information to make decisions; so if they have doubt to make a decision, many of them prefer to trust in their gut than on information. When they choose to trust in their gut, they are thinking based on facts, even when the fact is they don't have accurate information.

A business analytics initiative well done solves this lack of accurate information, creating a good scenario for the executives to use both gut and analytics to make better decisions.

Best Regards,

James Taylor said...

Posted my thoughts here
Time for a new approach I think

Marcus Borba said...


Nice article.

The link to the James' article is here.